So I get that finances (and lack of) are not the sexiest subject to talk about but we are in, what many like to call, an economic downturn. For some, it’s a politically correct way of saying ‘you may need to decide between paying your bills and feeding your family this year’.
This is a very uncertain time for many of our fellow Canadians. Our neighbours, family, coworkers and friends may be struggling. YOU may be struggling.
Finances are a funny thing though. When we begin to see financial problems coming, we hide. We avoid going into our bank, and we don’t contact anyone to prepare for, or manage our hardships. We don’t reach out for help and guidance when our income disappears.
Let’s look at it another way.
When you begin to feel a throbbing in your tooth, off to the dentist you go. When you get a pain in your stomach, you call the doctor.
When we notice something is not right, we get help.
But we often forget that when you see a recession coming, or you are knee-deep in one, there are financial professionals to reach out to for that as well. We may even think that if we stay away, we will protect ourselves. When in fact, the opposite is more likely to occur.
Your bank always has a handle on the economy and they understand that you might be dealing with financial uncertainty because of circumstances out of your control. Do not site back and wait, hoping that you will be able to make it month to month. This is a slippery slope and one wrong turn can cost you everything. You can take steps now to protect yourself and safeguard your financial future.
Talk to TD
- TD encourages customers facing financial difficulty and those concerned about their economic circumstances to come and talk to them as early as possible so they can work with you to find a solution.
- Financial uncertainty can make people anxious, but TD can help review the financial realities, assess the options available, and help you make sound decisions.
- Comprehensive financial planning provides a roadmap during times of uncertainty; if your plan is in place it will guide your action and responses.
How you can prepare for the unexpected
Maybe your situation isn’t as dire as I mentioned above, but that doesn’t mean you will always be sheltered from financial disaster. Here are some things to discuss with your financial advisor on your next visit to help prepare you for an uncertain future.
- Create a cash flow projection. Just like a small business, an accurate forecast of money flowing into and out of your personal accounts will help you predict your financial needs if/when your situation changes. Consider how long you might be out of work if you were to be laid off. Think about severance possibilities, and any other sources of income or expenditures.
- Consider spouse / partner / dependent expectations. It is important to review your finances at a high-level: spouses, partners, and dependents may be impacted by a change in circumstances and should be included in financial plans.
- Start an emergency fund. Three to six months’ worth of net income is considered the ideal safety net. With interest rates at historical lows, getting pre-approved for a home equity line of credit, which is easier done in advance, allows you to tap into those funds in times of crisis if needed.
- Evaluate your investment portfolio. TD’s financial planners can help you avoid choices that may have negative income tax and retirement implications, two areas that are often overlooked.
The TD Helps program team works with their customers when you need help with flexible mortgage payment options, loan consolidations, or mortgage payment deferrals. You can also look at extending amortizations, renegotiating lower mortgage payments or consolidating higher interest debt with secured debt.
TD Helps online community, you can get information to make good financial decisions. TD Helps online experts answer online questions about home ownership, saving/managing money, borrowing/managing debt, and investing/planning for retirement. An answer is just a click and question away, and a personalized response is posted within hours. Check out the community at www.tdhelps.ca.